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BARRIERS OF ECONOMIC
GROWTH
ECONOMIC GROWTH
Unemployment
Unemployment is also a major obstacle for economic growth. As unemployment
rate is increasing, these unemployed individuals have nothing to contribute in the
national income or GDP of the country. Since increased population and high rate
of migration has made it difficult for the government to provide employment to all
job seekers.
Overpopulation
World population is increasing at a very rapid rate. Increased population becomes a
hindrance for economic growth. The country has to fulfill the needs of more people
whereas earning hands in the nation are less.
Malnutrition
Factories.
Investment obstacles
Investment obstacles include
Lack of investors
Lack of incentives to invest
Institutional obstacles
Political corruption and bribery are barriers for work on merit and ethics.
Tax systems are arbitrary and unjust. Tax systems that are detrimental to incentives
for work and investment hinder economic growth.
Lack of entrepreneurship
The absence of sizeable and vigorous entrepreneurial class, ready and willing to
accumulate capital and initiate production, indicates that in many cases private
enterprise in intrinsically not capable of spearheading the growth process.
Trade
Trade and commerce are an important part of economic growth. If for any country
the terms of trade are not favorable the will face a huge gap in the balance of trade
and thus their economic growth will decline.
Conclusion:
Thus economic growth is hindered in the underdeveloped countries by many
factors which can mainly be categorized as
Economic obstacles
Administrative obstacles
Many of them are explained above. A great effort from the government and the
public is required for a sufficient rise in the economic growth.
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